Your Health = Your Wealth

That’s what Olivia Mitchell said in a 2007 Mon­ey mag­a­zine inter­view. Mitchell was the head of the Pen­sion Research Cen­ter at the Whar­ton School of Busi­ness. If retirees (or soon to be retirees) are con­cerned with their finan­cial future, she warns, they should invest in their health in retire­ment.

Accord­ing to her fig­ures, a 65-year-old cou­ple could need sav­ings of $295,000 just to cov­er insur­ance pre­mi­ums and out-of-pock­et med­ical costs over an aver­age life span. It’s even smarter to lead your life so that you need less health care in the first place.

Poor health also car­ries huge oppor­tu­ni­ty costs. After all, you can’t save if you can’t earn, and you can’t earn with­out your health. The medi­an cou­ple in their fifties and six­ties who devel­op chron­ic health prob­lems ends up increas­ing wealth at less than half the rate of their healthy coun­ter­parts.